Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of the end of the period covered by this Annual Report on Form 10-K. Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s, or the SEC’s, rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2021.
Management's Report on Internal Control Over Financial Reporting
This Annual Report on Form 10-K does not include a report of management's assessment regarding internal control over financial reporting or an attestation report of the Company’s independent registered public accounting firm due to a transition period established by the rules of SEC for newly public companies.
Changes in Internal Control over Financial Reporting
There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of fiscal 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting, except as described below.
Material Weakness Remediation
As previously reported, in connection with our management’s assessment of controls over financial reporting during the year ended December 31, 2019, we identified a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness that we identified occurred because we had inadequate processes and controls to ensure the timely reconciliations of certain customer-related settlement bank accounts.
During the years ended December 31, 2021 and 2020, the Company implemented measures designed to remediate the control deficiencies contributing to the material weakness. These remediation actions included: (i) establishing an internal team to support the Company’s entire control environment and its ongoing internal controls development and monitoring; (ii) educating control owners concerning the principles and requirements of each control, with a focus on those related to settlement operations; (iii) engaging a third-party to perform an independent assessment; (iv) deploying additional engineering, and settlement operations personnel; (v) developing a formal process level and monitoring controls to ensure timely reconciliation of these customer related settlement bank accounts; and (vi) implementing new monitoring controls including additional analyses, reconciliations, and other post-closing procedures to help mitigate the risk that controls do not operate effectively.
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We believe our remediation efforts resulted in the elimination of the previously identified material weakness as of December 31, 2021. While this material weakness has been remediated, we cannot assure you that we have identified all of our existing material weaknesses, or that we will not in the future have additional material weaknesses. We have dedicated resources to the design, implementation, documentation and testing of our internal control over financial reporting. We will continue to evaluate the effectiveness of our internal control over financial reporting and will continue to make changes that we believe will strengthen our internal control over financial reporting to ensure that our financial statements continue to be fairly stated in all material respects.
Neither we nor our independent registered public accounting firm has performed an evaluation of our internal control over financial reporting during any period in accordance with the provisions of the Sarbanes-Oxley Act. In light of the material weakness that was previously identified as a result of the limited procedures performed, we believe that it is possible that, had we and our independent registered public accounting firm performed an evaluation of our internal control over financial reporting in accordance with the provisions of the Sarbanes-Oxley Act, additional material weaknesses or significant deficiencies may have been identified.
Limitations on Effectiveness of Controls and Procedures
The effectiveness of any internal control over financial reporting is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting, no matter how well designed and operated, can only provide reasonable, not absolute assurance that its objectives will be met. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this item is incorporated by reference to the definitive Proxy Statement for the 2022 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days of our fiscal year ended December 31, 2021.
Item 11. Executive Compensation
The information required by this item is incorporated by reference to the definitive Proxy Statement for the 2022 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days of our fiscal year ended December 31, 2021.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item is incorporated by reference to the definitive Proxy Statement for the 2022 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days of our fiscal year ended December 31, 2021.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated by reference to the definitive Proxy Statement for the 2022 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days of our fiscal year ended December 31, 2021.
Item 14. Principal Accountant Fees and Services
The information required by this item is incorporated by reference to the definitive Proxy Statement for the 2022 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days of our fiscal year ended December 31, 2021.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) The following documents are filed as part of this Annual Report on Form 10-K:
1. Consolidated Financial Statements
See Index to Consolidated Financial Statements at Part II, Item 8 herein.
2. Financial Statement Schedules
All schedules have been omitted because they are not required, not applicable, or not present in amounts sufficient to require submission of the schedule.
3. Exhibits
Incorporated by Reference
Exhibit Number Description Form File No. Exhibit Number Filing Date
3.1 Amended and Restated Certificate of Incorporation of the Registrant.
S-1/A
333-256154
3.2
May 24, 2021
3.2 Amended and Restated Bylaws of the Registrant .
S-1/A
333-256154
3.4 May 24, 2021
4.1 Form of Class A common stock certificate of the Registrant.
S-1
333-256154
4.1
May 14, 2021
4.2 Amended and Restated Investors Rights Agreement, dated May 27, 2020, by and among the Registrant and certain of its stockholders.
S-1
333-256154
4.2 May 14, 2021
4.3 Warrant to Purchase Stock issued to Comerica Ventures Incorporated by the Registrant, dated October 11, 2013.
S-1
333-256154
4.3 May 14, 2021
4.4 Warrant to Purchase Stock issued to Comerica Ventures Incorporated by the Registrant, dated October 11, 2013 .
S-1
333-256154
4.4 May 14, 2021
4.5† Warrant to Purchase Common Stock issued to Uber Technologies, Inc. by the Registrant, dated September 15, 2020, as amended on January 7, 2021.
S-1/A
333-256154
4.7 May 24, 2021
4.6† Warrant to Purchase Common Stock issued to Square, Inc. by the Registrant, dated March 13, 2021.
S-1
333-256154
4.8 May 14, 2021
4.7† Warrant to Purchase Common Stock issued to Ramp Business Corporation by the Registrant, dated March 31, 2021.
S-1/A
333-256154
4.9 May 24, 2021
4.8* Description of the Registrant’s Securities.
10.1 #*
Form of Amended and Restated Indemnification Agreement between the Registrant and each of its directors and executive officers.
10.2 #
Amended and Restated 2011 Equity Incentive Plan, as amended, and forms of agreements thereunder.
S-1/A
333-256154
10.2 May 14, 2021
10.3 #
2021 Stock Option and Incentive Plan, and forms of agreements thereunder.
S-1/A
333-256154
10.3 June 1, 2021
10.4 #
2021 Employee Stock Purchase Plan.
S-1/A
333-256154
10.4 June 1, 2021
10.5 #
Senior Executive Cash Incentive Bonus Plan.
S-1/A
333-256154
10.5 May 24, 2021
10.6 #
Executive Severance Plan.
S-1/A
333-256154
10.6 May 24, 2021
10.7 #
Non-Employee Director Compensation Policy.
S-1/A
333-256154
10.7 May 24, 2021
10.12 #
Form of Director Offer Letter.
S-1
333-256154
10.12 May 14, 2021
10.13 #
Offer Letter between the Registrant and Jason Gardner dated June 6, 2011.
S-1 333-256154
10.8 May 14, 2021
10.14 #
Offer Letter between the Registrant and Omri Dahan dated June 9, 2011. S-1 333-256154
10.9 May 14, 2021
10.15 #
Offer Letter between the Registrant and Kevin Doerr dated February 25, 2020. S-1 333-256154
10.10 May 14, 2021
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10.16 #*
Offer Letter between the Registrant and Mike Milotich dated February 3, 2022.
10.17 #
Separation Agreement and Release between the Registrant and Omri Dahan, dated March 17, 2021. S-1 333-256154 10.11 May 14, 2021
10.18 #*
Separation and Release Documentation between the Registrant and Kevin Doerr.
10.19 Lease Agreement by and between the Registrant and MACH II 180 LLC, dated on or about March 1, 2016, as amended on November 8, 2017 and March 14, 2019.
S-1 333-256154 10.13 May 14, 2021
10.20†*
Master Services Agreement by and between the Registrant and Square, Inc., dated April 19, 2016, as amended on September 1, 2016, October 18, 2016, December 24, 2016, June 30, 2017, August 2, 2017, October 1, 2017, April 1, 2018, June 6, 2019, September 20, 2019, February 7, 2020, November 18, 2020, November 18, 2020, March 13, 2021, May 21, 2021, and January 27, 2022.
10.21†*
Amended and Restated Prepaid Card Program Manager Agreement by and between the Registrant and Sutton Bank, dated April 1, 2016, as amended on December 31, 2017, September 1, 2018, August 1, 2020, and July 1, 2021.
21.1* Subsidiaries of the Registrant.
23.1* Consent of Ernst & Young LLP, independent registered public accounting firm.
24.1* Power of Attorney (incorporate by reference to the signature page to this Annual Report on Form 10-K)
31.1* Certification of the Principal Executive Officer, pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2* Certification of the Principal Financial Officer, pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1** Certification of the Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2** Certification of the Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS *
Inline XBRL Instance Document.
101.SCH *
Inline XBRL Taxonomy Extension Schema Document.
101.CAL *
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF *
Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB *
Inline XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE *
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104 *
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
† Certain confidential information contained in this exhibit has been omitted because it is both (i) not material and (ii) is the type that the Registrant treats as private or confidential.
# Indicates management contract or compensatory plan, contract or agreement.
* Filed herewith.
** Furnished herewith. The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the SEC and are not to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.
Item 16. Form 10-K Summary
Not applicable.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
MARQETA, INC.
Date: March 11, 2022
By: /s/ Jason Gardner
Name: Jason Gardner
Title: Chief Executive Officer (Principal Executive Officer)
Date: March 11, 2022
By: /s/ Michael (Mike) Milotich
Name: Michael (Mike) Milotich
Title: Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jason Gardner, Michael Milotich, and Seth Weissman, and each of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ Jason Gardner Chief Executive Officer and Director March 11, 2022
Jason Gardner (Principal Executive Officer)
/s/ Michael (Mike) Milotich Chief Financial Officer March 11, 2022
Michael (Mike) Milotich (Principal Financial and Accounting Officer)
/s/ Amy Chang Director March 11, 2022
Amy Chang
/s/ Martha Cummings Director March 11, 2022
Martha Cummings
/s/ Gerri Elliott Director March 11, 2022
Gerri Elliott
/s/ Helen Riley Director March 11, 2022
Helen Riley
/s/ Arnon Dinur Director March 11, 2022
Arnon Dinur
/s/ Judson Linville Director March 11, 2022
Judson Linville
/s/ Christopher McKay Director March 11, 2022
Christopher McKay
/s/ Godfrey Sullivan Director March 11, 2022
Godfrey Sullivan
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